International trade helps generate more employment through the establishment of newer industries to cater to the demands of various countries. Exports create jobs and boost economic growth, as well as give domestic companies more experience in producing for foreign markets. Free international trade can increase the availability of all goods and services in all the countries that participate in it. If the productive efficiency of the home country increases, it will be to the advantage of the foreign country (and vice versa), for it will lead to more favorable terms of trade for the latter. 1. consumers enjoy increases variety of goods.  The theory of comparative advantage explains why countries trade: they have different comparative advantages. The global trade can become one of the major contributors to the reduction of poverty. The gain from international trade also depends upon the relative productive efficiency of the country. The gains from international trade are of two types: 1. Nations with strong international trade have become prosperous and have the power to control the world economy. Research shows that exporters are more productive than companies that focus on domestic trade. It shows that the gains from international trade result from pursuing comparative advantage and producing at a lower opportunity cost. X,0 equal respectively in the isolated state to the quantities (unbarred) consumed. This will help countries to bring-down their unemployment rates. The Gains from International Trade The total amounts produced of the respective commodities will be indicated by the barred letters, X10, X2. [4] Before introducing possibilities for trade into our system, it will This research overwhelmingly supported the idea that specialization and trade among nations raises national income. More employment could be generated as the market for the countries’ goods widens through trade. Another gain from trade comes in the form of an increased product variety. 2. producers sell to a larger market (achieve lower costs by producing on a larger scale) 3. competition from abroad may reduce power of domestic firms (total welfare increases) In addition, international trade can make a brooder range of inputs and technology available and thereby increase economic growth. Measuring the Gains from International Trade Allocated across Countries: Developing the Indices of International Trade Benefits Prepared by Dongsik Chungt ABSTRACT The intraindustry trade, multiple posttrade equilibria and multiple pretrade equilibria almost invalidate the role of the terms of trade as a divider of trade gains and as a Over time, companies gain a competitive advantage in global trade. Advantages of International Trade . 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